We must heed warnings from the 1970s bear market

If there is a risk that inflation is being underestimated in the advanced economies, it is at its greatest in the US. The economy is growing at a good pace and is being deluged with fiscal largesse when already close to full employment. Treasury yields are increasingly sensitive to the risk of overheating and that in turn, according to Konstantinos Venetis of TS Lombard, has made Treasuries less attractive as a hedge, diverting some haven flows to the gold market. Gold, of course, was just the place to be in the bear market of 1973-74.